| North American Currency Union |
Article Index for North American |
Website Links For North American |
Information AboutNorth American Currency Union |
| CATEGORIES ABOUT NORTH AMERICAN CURRENCY UNION | |
| currencies of the americas | |
| monetary unions | |
|
The North American currency union is a hypothetical situation in which the major countries of North America – specifically Canada and the United States , possibly Mexico – would share a common Currency . This idea is based on the common European Union currency, the Euro . There are also related proposals for a single currency for all of the Americas . The hypothetical currency for both of these ideas is sometimes referred to as the '''''amero'''''. __TOC__ BASIS The C.D. Howe Institute , one of Canada 's conservative economic and social Think Tank s, advocates the creation of a shared currency between Canada and the United States . The Fraser Institute , another conservative think tank, has also argued in favor of the amero. Herbert G. Grubel , a senior fellow of the Fraser Institute, came out with a book entitled ''The Case for the Amero'' in September 1999. Conversely, left of center nationalist groups such as the Council Of Canadians strongly oppose any move towards currency union, arguing that it would be harmful for the Canadian economy and for Canadian Sovereignty . SUPPORT Canada United States One argument for the United States to press for the adoption of a North American currency is the fact that it would essentially make Canada and possibly Mexico a monetary dependency of the United States which could thus be exploited for political and economical gains. Secondly, given the euro's new prominence, a dollarization policy adopted by either Canada or Mexico, or even a change to the proposed amero, could help reassert the dollar's dominance world-wide. However, it is unlikely that this would be sufficient to counter the "threat" of another global currency if only two nations (the United States and Canada) were to adopt it. Mexico Support in other regions There are many lower levels of currency cooperation that have occurred in the Americas. A number of nations – such as Argentina , Brazil and Canada – have at times tied their currency to the United States Dollar , and in 2000 , Ecuador adopted the U.S. Dollar as its sole currency. In much of Central America and the Caribbean the U.S. dollar is already a ''de facto'' secondary currency. It serves as parallel legal tender in both Panama (since independence in 1903 ) and El Salvador (since 2001), and unofficially in Cuba where the Convertible Peso is currently pegged at 1 peso equals US$1.08 (previously, it was until 24 March 2005 , 1 peso = US$1). Some pundits thus argue that currency union is all but inevitable, whether it is desired or not. CRITICISMS A major obstacle to the creation of a unified currency is the sheer dominance of the United States in any such union. Unlike any country in the EU, the USA has a larger economy than the rest of its respective continent/union combined. Differing cultural and social/economic objectives amongst the other western nations would be another point of contention . A University Of California, Santa Barbara paper puts forward the idea that the United States simply has too many advantages from the status quo to move towards a single currency. The United States dollar already acts as a global currency, meaning any transition to a 'new' currency would risk compromising this position and could cause a shift towards the euro or Yen . The Greenback was used in over half of all the world's exports, double the total United States foreign trade. The adoption of an amero could threaten the seignorage that America currently gains from its American dollar. While seignorage would still be gained from the amero, this would be shared between the Bank Of Canada , the Federal Reserve and possibly the Bank Of Mexico . Therefore, even if the amero was used just as much as the U.S. dollar, the advantages would be shared among two or more countries, and not exclusively earned by the United States. Secondly, several problems could arise in regards to macroeconomic management. By submitting to a common currency, both countries would lose considerable autonomy in the setting of interest rates among other issues. IN THE ARTS AND LITERATURE
AMERO FANTASY COINS REFERENCES SEE ALSO
EXTERNAL LINKS
|
|
|